In brief, the Income Tax department claimed that the Shiv Mandir Devsttan Panch Committee engaged in religious not charitable activities, and this is where the Income Tax Tribunal overruled them. The Income Tax Tribunal quotes a Supreme Court judgement from 1954 - I think they are misquoting it.
The Economic Times reports (the Times of India article quoted below is incoherent):
Hinduism: Tax Tribunal says donations to Nagpur temple trust exempt from tax
MUMBAI: "...Lord Shiva, Hanumanji, Goddess Durga does (sic) not represent any particular religion, they are merely regarded to be the super power of the universe....Technically Hindu is neither a religion nor a community."
Who said it? Neither an Advaita philosopher nor a stalwart of Arya Samaj. Nor are these the words of an iconoclast Brahmo of another era. And, certainly not ours. This was spelt out by none other than a tax tribunal while deciding whether someone donating to a particular temple trust in Nagpur can claim tax benefit.
According to the Income-Tax department, Shiv Mandir Devsttan Panch Committee Sanstan - the entity concerned - is carrying out 'religious activities' and spends money for the maintenance of temples.
But the law says anyone making a donation will enjoy a tax deduction - in other words, the person's taxable income will be lower - only if the institution receiving the donation is into 'charitable activities', and is not working for the benefit of any particular religious community or caste.
The department also said the trust spends more than 5% of its total income "for religious purpose".
Tax benefits enjoyed by donors are often the lifeline for many such institutions and it's a provision the government has retained as the needs of charity far outstrip contributions from philanthropists.
Understandably, the Devsttan Committee moved the tribunal. Its arguments were simple: the temple is open to everybody irrespective of caste or creed; even those who have no faith in the deities can visit the temple, and it does not belong to any particular religion.
But tax officers, while pointing out the object clause of the temple, were categorical that the activities of the assessee were essentially religious in nature. The clause describes the various activities.
Bench Quoted Clutch of Past Cases
The various activities of the trust include worshipping the deities, celebrating festivals such as Shivratri, Hanuman Jayanti, etc, providing facilities for people visiting the temples and utilising balance funds for social and cultural activities, providing education to poor children and helping people affected by natural calamities.
It's here that the tribunal bench, comprising DT Garasia (judicial member) and PK Bansal (accountant member), stepped in. Their order went in favour of the trust.
Nowhere, the tribunal said, the object clause "talks of advancement, support or propagation of a particular religion, worshipping of Lord Shiva, Hanumanji, Goddess Durga and maintaining of temple, in our opinion, cannot be regarded for the advancement support or propagation of a particular religion".
They felt no evidence was placed by the tax department which may prove that these object relate to a particular religion and Lord Shiva, Hanumanji, Goddess Durga are regarded to be the super power of the universe and do not represent any particular religion.
The bench quoted the case of Commissioner of Hindu Religious and Charitable Endowments Madras vs. Sri Lakshmindra Thirtha Swamiar 1954 SCJ335, where 'religion' has been expressed to mean a matter of faith with individuals or communities and it is not necessarily theistic.
The Times of India reported:
Shiva worship not a religious act, income tax tribunal saysMUMBAI: Lord Shiva, Hanuman and goddess Durga do not represent any particular religion but are regarded as supernatural powers of the universe, the Nagpur income tax appellate tribunal has said.
The observation came when the tribunal was hearing an appeal by Nagpur-based Shiv Mandir Devstan Panch Committee Sanstan against an income tax commissioner's order denying it tax exemption on grounds that more than 5% of its expenditure was incurred on religious activities.
The I-T act stipulates that for the purpose of tax exemption, an institution or trust must not be for the benefit of any particular religious community or caste.
Differing with the I-T commissioner's order, the tribunal said, "Expenses on worshipping of Lord Shiva, Hanuman, Goddess Durga and on maintenance of the temple cannot be regarded as having been incurred for religious purposes."
The tribunal went on to say that Hinduism was neither a religion nor a community. It consisted of a number of communities having different gods worshipped in different ways. Even the worship of god wasn't not essential for a person who had adopted the Hindu way of life, it said.
"Hinduism holds within its fold men of divergent views and traditions who have very little in common except a vague faith in what may be called as the fundamentals of Hinduism," the tribunal observed.
According to it, the word 'community' meant people living in the same place, under the same laws and regulations and who have common rights and privileges. This may apply to Christianity or Islam but not to Hinduism. "Technically, Hinduism is neither a religion nor a community," the tribunal said.
In 2008, the sanstan had spent Rs 82,977 on maintenance of its building, providing free food, festival prayers, training people in tailoring and yoga, and free distribution of spectacles. The I-T commissioner had said that expenses for building maintenance, providing free food, festival prayers and daily expenses related to 'religious purposes'. This added up to more than 5% of the organization's expenditure. Only Rs 6,700 was spent on non-religious activities, the taxman said.
The sanstan had countered this, saying its temple was open to everybody, irrespective of caste and creed. "The temple does not belong to a particular religion. Installing idols is not a religious activity," the counsel for the sanstan said.
The I-T tribunal's accountant member K Bansal and judicial member D T Garasia agreed. They said the word 'religion' meant belief in, and worship of, a "superhuman controlling power", a particular system of faith and worship.
"It means the trust should not be for the benefit of any particular group of persons having common belief in worshipping of superhuman controlling power or having common system of faith and worship. If the trust is for the benefit of any particular religious community, it would include the advancement, support or propagation of a religion," they said, adding that no evidence or material had been placed on record to prove that the sanstan was promoting a particular religion.